As July draws to a close and many Texas families are preparing to send their children back to school, public school boards across the state are facing significant budget shortfalls due to rising operating costs and stagnating state funding.
Public education advocates last year called on lawmakers to increase the base allocation, the basic amount schools receive per student, which has remained unchanged since being increased to $6,160 in 2019.
To analyze Texas’ complex school finance system, Community Impact interviewed Bob Popinski, senior policy director at education policy nonprofit Raise Your Hand Texas. This interview has been edited for length and clarity.
Can you give us an overview of how Texas public schools are funded? Where does the money come from?
It’s a complicated system, right? We have 5.5 million students, nearly 70,000 teachers, and a whole lot of staff and administrators. So when you look across Texas, it’s a large, complicated system with different student and district characteristics, rural, urban, suburban. Right now, Texas is in the bottom 10 states for per-pupil funding. A new report from the National Education Association says Texas is about $4,800 below the national average.
Texas has what is called an equalization system, which means the Legislature sets the amount of per pupil funding and school districts are guaranteed that amount. Revenue for school districts comes from a few different sources: local school district property taxes and general state revenues. General state revenues come from sales taxes, oil and gas taxes, etc.
Some of the money that gets directed to schools for targeted programs is federal money, so if you average out the per-student funding across the state, the money that actually gets to the classroom — the money that pays for the day-to-day work of teachers, cafeteria workers, bus drivers, principals and the like — averages about $10,000 per student across the state.
Districts across Texas are facing big budget shortfalls for the coming fiscal year. What’s causing them?
There’s a mix of about eight or nine factors, each impacting districts differently, but there are two drivers that are impacting most districts: Since 2019, the last time the school funding formula was increased, inflation has increased 22% — that’s the biggest driver.
We all know the feeling. So the district is operating at about a $1,400 deficit compared to 2019. If you look at the base allocation, which is the foundational component of the school funding formula, it’s $6,160 and hasn’t been updated since 2019. So inflation is the biggest factor.
The federal stimulus is ending. Districts knew that, but it doesn’t mean student learning loss after the pandemic has gone away. There are still state requirements for accelerated instruction and intensive tutoring if students fail the (Texas Academic Assessments) tests. There are still many programs to help students progress academically that districts would like to continue, but with the federal stimulus going away, districts may not be able to take advantage of them.
In addition to these two main factors, some school districts are seeing declines in student enrollment. Think of it this way: If a district spends roughly $10,000 per student on teacher salaries and loses 10 students, the district doesn’t have to pay $100,000 in teacher salaries. But they still need a teacher in the classroom, they still need bus drivers, they still need the lights on, the air conditioning. So those are big fixed costs that districts don’t necessarily have control over.
Schools are also identifying more students than ever before who need special education, especially those with dyslexia. And identifying them costs money. On top of that, there’s a new law that says we have to have armed security on each campus. School districts are trying to find and maintain the funding for that. When that law passed, the school safety allotment only increased by 28 cents per student, or $15,000 per campus. And that’s woefully inadequate compared to what it actually costs to staff a campus.
There are a number of factors that could force school districts to create or implement deficit budgets or make cuts to programs. This is a big issue not just for next year, but the year after that, because the Legislature doesn’t meet until January 2025 and (lawmakers) don’t typically adopt everything until the end of May.
The 89th Texas Legislature convenes in January. What are you watching for in the upcoming legislative session, and what should Texans be on the lookout for?
School funding will be one of the priorities for the Legislature to address. The Comptroller said (July 17) that there is currently over $21.2 billion available in additional state revenues, including $4.5 billion that was not used in the school district funding formula because none was approved last Legislature. So, first and foremost, I want to make sure that school districts keep up with inflation and, more importantly, keep up with the needs that are necessary to ensure student achievement.
Special education is going to be a big issue. Are we still identifying the kids we should be identifying? Are we properly funding the special education formula? Last time I checked, special education was underfunded by $1.8 billion. That puts pressure on our kids.
Plus, on school vouchers, there’s going to be a lot of pressure in the next Congress to get this across the finish line, as we saw in the last election and the last Congress. And what (Raise Your Hand Texas) is hoping is that Texas will learn from other states why this is still a bad policy for our state. When you look at other states that have passed universal voucher systems within the last year or two, some of the issues they’re having are not surprising.
If you look at the state of Arizona, they’re facing a budget shortfall of over a billion dollars because the majority of the kids on the universal voucher went to private school the year before. It varies by state, but it’s 70% to 80%. Private school tuition has gone up substantially, and some states have even implemented graduated tuition rates. If you get a universal voucher, you’re actually paying more for tuition. So I hope that there are a lot of considerations and guidelines for lawmakers to consider when they consider a voucher program.
At the end of the day, with 5.5 million kids in the state, there’s a lot more we need to focus on. We need to not only increase our teacher workforce, but we need to establish an accountability and evaluation system that does the right thing for our kids. And we want it to be fair on both ends. We want it to be rigorous for kids in public schools, but also in private schools (and other education systems). So there’s going to be a lot of interesting things happening in the next legislative session.
